Jul 28 2004
International Steel Group Inc., today announced that it has completed the purchase of substantially all of the assets of the Cliffs and Associates Limited (CAL) Hot Briquetted Iron (HBI) facility located in Trinidad and Tobago, for a purchase price of $8 million in cash, plus assumed liabilities. In addition, CAL may receive up to $10 million in future payments contingent upon production and shipments.
HBI is a high-quality scrap substitute that can be used as an iron source in steelmaking operations. The facility has the capacity to produce approximately 500,000 metric tons of HBI annually. The HBI process uses natural gas to reduce iron ore fines and yields a low-cost scrap steel substitute that can be used in both electric arc furnace and traditional blast furnace steelmaking. HBI can also be used to increase the efficiency of blast furnaces and thereby reduce the use of coke.
The Trinidad and Tobago HBI project began in the mid-1990s as a joint venture among Cleveland Cliffs, Lurgi Metallurgie (now known as Outokumpu Technology GmbH), and LTV Steel. Production began in 2000 but ceased a year later as a result of depressed global scrap iron and HBI prices, changes in the makeup of the joint venture, and other factors. Now that the purchase has been completed, ISG expects to begin HBI production at the facility during the fourth quarter of 2004.
“Consistent with our focus on developing our raw materials capabilities, we are committed to restarting and operating the HBI facility in Trinidad and Tobago as soon as possible,” said Rodney B. Mott, ISG’s President and Chief Executive Officer. “This facility is strategically located near natural gas reserves, which provide an inexpensive source of energy for the production of HBI.”
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